Dec 7, 201711:20 AMMaking Madison
with Buckley Brinkman
The robots are coming!
(page 1 of 2)
Three very clear trends will transform manufacturing in the coming years. Additive manufacturing changes the fundamental ways parts are designed and created; connected devices make operations more visible and expand the ability to run operations remotely; and automation and robotics refashion jobs as costs plummet and capabilities explode. These clear and unstoppable trends will impact all of us.
The McKinsey Global Institute (MGI) just issued an expansive new study on automation, “Jobs Lost, Jobs Gained: Workforce Transitions in a Time of Automation.” The report examines employment changes across 800 occupations in six benchmark countries.
MGI identifies the content in each of those occupations that is most susceptible to automation and estimates its overall impact on those positions. MGI analysis shows that up to 32% of the workforce — some 166 million jobs — may be affected by automation and force shifts to new occupations. This issue affects all of us — not just those in manufacturing.
According to MGI, the speed of these changes depends on four factors: wage levels, demand growth, demographics, and the mix of sectors and occupations within the larger economy. Areas with higher wages can build a stronger business case for automation. The strength of economic growth and the proclivity for innovation create additional product demand that also spurs the case for automation. Regions with declining workforces and an aging population make automation easier to justify. Finally, economies with a mix of sectors and occupations most susceptible to automation can expect to see rapid change. The U.S. — and especially a state like Wisconsin — ranks high on all four dimensions and will be at the forefront of operational automation.
We’re in the crosshairs of automation change and we need to shift our focus to the most vital issue. No, it’s not lost jobs. It’s worker redeployment. Labor markets always adjust to technology shocks and this time will be no different. The MGI report agrees with the historical precedent that there will be new jobs for people to fill. We will have jobs and the displaced people needed to fill them. Therefore, our support systems must shrink the time it takes to redeploy these workers and minimize the transition friction that could cause the economy to falter and wages to stagnate.
Unfortunately, our traditional educational models and institutions are not set up to meet the challenge. Michael Chui, one of the MGI study authors, says it best: “We do a good job educating people during the first 20 years of their life and a terrible job after that.” I agree. Don’t worry about our kids. They understand this technology and the need it creates for lifelong learning. The real issue surrounds retooling old dogs like me by providing on and off ramps for us to engage the education system as we need to rebuild and refresh our skills. Our present education paradigm doesn’t provide for these needs, and it certainly isn’t fast or flexible enough to respond to these new challenges.
If we’re going to succeed in this new environment, we need to change this paradigm and it will be up to businesses to lead the effort — not just for the greater good of society, but also for their own self-interest. Companies will need more effective redeployment of displaced workers to grow their business because the limited labor supply makes it necessary to engage all available workers.